Welcome

Search

Search for:

About Paschal

Paschal is the Fine Gael TD for Dublin Central and in June 2017 was appointed as the Minister for Finance & Public Expenditure and Reform. Prior to his appointment as the Minister for Finance & Public Expenditure and Reform, he served, from May 2016-June 2017, as the Minister for Public Expenditure and Reform, and from ...

Ireland and the US – The Ties that Bind

19th November, 2017

Ireland’s ties to the United States are unique. Over 33 million US citizens claim Irish heritage. That’s fully 10% of the US population. And, while the ancestral links of many are generations old, their affinity with our island is very current; one in every ten US visitors to Europe last year came to Ireland.

These personal relationships underline and sustain the economic ties between our nations. And these too are exceptional – transatlantic trade in goods and services total approximately $100 billion per annum. Over 700 US companies have operations in Ireland, directly employing 150,000 people. And more than 400 Irish firms have a presence in America, employing almost 100,000 US citizens across all 50 States.

This week I visited Washington DC and New York, which afforded me the opportunity to emphasise the clear mutual benefit of such two way exchange to leaders across US Government, media and business.

I outlined how, as a small and open trading economy, Ireland is making the case for globalization and free trade – the tools that have transformed our economy and society.

I acknowledged that while difficulties may be borne out of our enhanced interconnectedness, these are difficulties that we can overcome – how, together, we can ensure that the mutual benefits of trade and investment are preserved and fairly distributed across our societies.

Throughout my visit, I received a positive hearing to the message that challenges of globalisation must be tackled globally: that Ireland, along with our OECD partners, including the US, must be at the heart of such efforts. It is only by working together that we can ensure a fair playing field and a common set of rules through which to engage.

During the course of my visit, the US Senate and House of Representatives were in process of debating significant changes to the US tax code. This includes a reduction in the headline rate of corporate tax and a transition from a worldwide to a territorial tax system. If agreed, this will be the country’s first comprehensive tax reform in three decades. What implications such reform might have for America’s international partners, including Ireland, remains uncertain.

What is certain, however, is that Ireland is committed to maintaining a stable, clear and transparent corporate tax regime, centred around a 12.5% corporation tax rate, which is applied consistently and across a wide base.

This, coupled with investment in our education system and membership of the European Union, has facilitated the delivery of a competitive, predictable tax and regulatory framework, which has been key to Ireland’s economic transformation over several decades.

For an island nation on the periphery of Europe, this has been and remains today an entirely legitimate industrial policy. It has succeeded in enabling us to develop an economy of real diversity and substance.

But while it has been a driver of growth, we must recognise that our economy does not run on a single engine. For most enterprise, Ireland’s human capital is at least as important as our policy framework. Our population is Europe’s youngest, with 40% under 29 years of age. Our educational attainment rates are amongst the highest in the OECD. And importantly, as we have opened up to the world, we have also become home to international talent.

This is the message I brought this week to America; one of certainty, of stability and of confidence in our shared future. Questions raised during the week about Ireland’s corporate tax rate and the potential for change in the years ahead were met head on. Our corporation tax rate, as a bedrock of our investment policy will remain as is, now and into the future.

Questions have been raised through the recent publication of the ‘Paradise papers’. This centres on international taxation and the aggressive tax planning by multinational companies.

It is only through international cooperation that we can ensure international tax rules are fit for the modern world. Ireland is playing a leading role in work to reform the international corporate tax system, which again, we acknowledge must be coordinated on a global scale.

We have been proactive in implementing the new rules agreed at the OECD BEPS Project, a fact highlighted earlier this year when OECD peers awarded Ireland the highest international rating on tax transparency and exchange of information. And we are committed to working with OECD partners to find evidenced based answers to the difficult questions posed by the digitalisation of the global economy and to ensure that profits are aligned with where value is created.

For this, as for many other complex global issues, transatlantic engagement is indispensable. Ireland’s role as a gateway between the US and the EU is set to become ever more important in the years ahead.

As my visit this week confirmed, it is a significant responsibility, but one we are well placed to deliver.